Iraq is reliant on Iranian gas and electricity and tries to avoid a repeat of violent protests over power shortages which hit Basra and other cities last year. The country currently has an outstanding debt of around $2 billion, as Iranian Oil Minister Bijan Namdar Zanganeh announced, for previous gas and electricity purchases from Iran. Via the said SPV it can pay what it owes Iran.

The Arab country has long been in a war of sorts with the US which wants the imports be halted in line with Washington’s policy of “maximum pressure” on the Islamic Republic. The SPV mechanism is the product of months of talks between Iraqi and Iranian officials and those in the US, since Iraq has been pushing back on US pressures to stop buying natural gas and electricity from Iran in what has become a major point of conflict between Washington and Baghdad.

As reported, under the new mechanism, the Iraqi government will pay Iran for gas by depositing money into a special bank account inside Iraq, in Iraqi dinars. Iran will not be able to withdraw the money, but will be able to use it to purchase goods from outside Iraq.

Baghdad’s SPV would likely be set up at the Trade Bank of Iraq. A TBI source announced that the bank had been involved in the negotiations but the account had not yet been created. “We are in discussions to reach an agreement, which would be fully within US exemptions,” the source said.

One official said Iraq would be like “Iran’s ATM” under the new mechanism, through which Tehran would probably import goods from outside the Arab country.

The post Iraq working on own SPV to pay off debts, continue imports from Iran appeared first on Iran News Daily.

In fact, it is merely an accounting office established due to lack of banking relations between Iran and Europe. The issue proves that INSTEX is not capable of meeting Iran’s least expectations considered in JCPOA.

After withdrawal of Trump form the nuclear deal in in May 2018, the Iranian government did not decide to reduce its commitments to JCPOA. Instead, on the way to guarantee its interests and preserve the nuclear deal, Iran preferred to act upon the deal unilaterally and kept negotiations with Europeans.

Talks with Europe started just a few days after withdrawal of the US from JCPOA. Europeans vowed that they would stand against US sanctions via fulfilling their commitments under JCPOA and to continue trading gold, precious metals and cars, purchasing oil and petrochemicals, having cooperation on ports and shipping sector, having banking ties and brokerage relations with Iran. Europe announced its four decisions to counter US sanctions, afterwards. The ones proved to be futile very soon.

Practicality of Europe’s four promises

1. Having Blocking Statute operational

The updated Blocking Statute- part of the EU’s support for the continued full and effective implementation of JCPOA- was implemented on August 8, 2018. The act, however, can be translated into a political gesture, since in practice it could not persuade European companies to stay in Iran and they started to leave the country one after another. The EU remained silent.

On November 10, 2018, Iranian Foreign Minister Mohammad Javad Zarif explained the reason Iran remained in JCPOA. “It is a fact that Europeans have not been able to fulfill their commitments to JCPOA but this does not do any harm to the benefits of the JCPOA and to international and regional peace.”

2. Enabling European Investment Bank (EIB) to finance EU investment in Iran

The EU ratified a plan on July 5, 2018, to ease finance activities of EIB in Iran. But it was not put into practice since EIB did not accord to act upon due to US sanctions.

3. Reinforcing non-stop cooperation with Iran on energy sector and SMEs

Despite the made statements by Europeans, no specific result was obtained in this field.

4. Investigating possibility of banking transactions with Iran’s central bank

After imposition of US sanctions on Iran, European banks, concerned about US’ heavy fines and secondary sanctions, rejected all the banking transactions with Iran. They even quit doing transactions related to trade on non-sanctioned goods including food and medicine with the country.

Europeans took advantage of Iran’s inactiveness against US sanctions and could keep Iran in JCPOA without paying any specific cost.

Failure of SPV and Iran’s passivity

Europe established a barter system, Special Purpose Vehicle (SPV), to ease oil and trade financial transactions with Iran. The channel was supposed to become operational before US oil sanctions imposed on November 4, 2018. But the plan was defeated since no European country accepted to host it.

Despite Europeans’ vows and announcements, SPV did not become operational even by the end of 2018 i.e. Iran spent months waiting for Europeans to make their promises.

INSTEX less than Oil-for-Food Program (OIP)

Europe minimized SPV into from an exchange mechanism to what is called INSTEX, which is merely a trade instrument. No money is exchanged in INSTEX but it acts as an accounting office in where mortgages and debts among European companies and Iran are registered. Goods are swapped with oil without having any monetary transaction done.

In their joint statement on the last day of January, France, Germany and UK introduced the INSTEX which was aimed at facilitating legitimate trade between European economic operators and Iran and making exchange of basic goods including food and medical equipment and medicine between Iranian companies and foreign ones by circumventing the American banking system and currency. This was neither put into practice.

Eventually after almost a year of Iran’s inactiveness, the country decided to reduce its commitments to JCPOA giving Europeans a 60-day ultimatum to fulfill their commitments.

On June 28, 2019, JCPOA joint commission announced that INSTEX had been made operational.

However, despite EU’s promises after US withdrawal from JCPOA, INSTEX is only practical for trade of non-sanctioned goods, including food and medicine, while such types of goods are exempted from all types of sanctions due to humanitarian reasons. If the US wanted to implement a system to put its sanctions into practice, its supposed system would definitely be something exactly the same as INSTEX.

The European mechanism is much worse than what was applied in Iraq to swap oil for food in 1990s.

It is much more humiliating. Today, Europe’s purchase of oil from Iran is near to zero and Iran should inject its oil revenues to INSTEX to be able to merely import food and medicine.

In addition, INSTEX is in contrast with JCPOA’s appendix 2, which urged it to facilitate trading gold, precious metals, cars, purchasing oil and petrochemicals, having cooperation on ports and shipping sector, having banking ties and brokerage relations with Iran. It does not facilitate sales of Iranian oil and is not capable of meeting the least expectations of Iran under JCPOA.

Europe big brother for Iran’s foreign trade

INSTEX would act as Europe’s observatory mechanism on Iran’s foreign trade in an economic war.

While its purchase of Iranian oil stands at zero, Europe requires Iran to inject its revenues from selling oil to China, Turkey, India ant etc. into INSTEX to provide the country with food and medicine. This would give Europe an upper hand in controlling Iran’s foreign trade transactions.

INSTEX an introduction to new banking, missile, regional JCPOAs

Europeans have established INSTEX under US sanctions and with humanitarian aims. They, however, have required Iran to implement FATF for having INSTEX fully implemented. In fact, Europe is using extortion against Iran.

This makes INSTEX an instrument for controlling Iran’s missile capabilities and regional power, as well.

Today, that the European INSTEX has failed to secure Iran’s minimum expectations in oil and banking sectors – as stated in the State Security Council’s statement.

The Islamic Republic of Iran should take the second step about JCPOA to make the other side fulfill its commitments. Otherwise, no achievements would there for Iran and its authority would be questioned.

The post Mirage named INSTEX; A review over European JCPOA: Report appeared first on Iran News Daily.

“Europe should return to its commitments under the JCPOA [Joint Comprehensive Plan of Action] because INSTEX has no effect on Iran’s economy,” he added.

The remarks came as the Joint Commission of the JCPOA announced on Friday that long-awaited INSTEX had finally been made operational and available to all EU Member States and that the first transactions are being processed.

According to the Nuclear Deal, the Europeans were obliged to establish trade relations with the Islamic Republic of Iran and to allow banking transactions to take place in the European banking network, however, after the JCPOA implementation, Europeans did not fulfill these two commitments, noted the MP.

Pour-Ebrahimi went on to say that recent developments, including the downing of an intruding US spy drone by Iranian Armed Forces and Iran’s announcement on reducing commitments to the deal, made Europeans feel that they should pay the price for Iran’s remaining in the JCPOA. “So they announced that INSTEX had been operational but this mechanism is not related to JCPOA commitments, rather, it can be a beginning for implementation of the deal.”

“INSTEX is actually banking transactions for trading food, medicine and medical equipment; this an insult the Iranian nation,” he lamented, adding, “the way Europeans act on INSTEX is not acceptable … Europe should honor its JPCOA commitments in trading and banking sectors with Iran. The export of Iranian oil and products are an important part of the JCPOA.”

In late January 2018, Europe announced the establishment of a special trade mechanism dubbed as INSTEX (Instrument in Support of Trade Exchanges) in a bid to save JCPOA after the withdrawal of the United States. The mechanism, which is yet to prove its effectiveness, is said to initially cover trades of food, medicine and medical devices and to gradually include other areas.

Also earlier on Saturday, Iranian envoy to the United Nations Majid Takht-e Ravanchi said “I personally believe that INSTEX is not enough in the current circumstances. Without money, this mechanism is like a beautiful vehicle without fuel.”

The post ‘Useless’ INSTEX cannot solve Iran’s economic problems: MP appeared first on Iran News Daily.

On May 8, exactly a year after the US pulled out from the JCPOA, Iran revealed countermeasures to US’ withdrawal, giving the other remaining parties to the JCPOA 60 days to comply with their commitments, particularly those regarding Iran’s economic interests in the banking and energy sectors, before reducing portions of its own commitments to the agreement stage by stage. Iran says its decision to reduce commitments to the JCPOA, given the current status of the deal, is within its rights under the agreement

Kharrazi quoted the British diplomat as having said that INSTEX (Instrument in Support of Trade Exchanges) will be operationalized ‘soon’ and that UK supports the Iran deal but London has its own set of problems with Washington. “These are repetitive words,” Kharrazi said.

In late January 2018, Europe announced the establishment of a special trade mechanism dubbed as INSTEX (Instrument in Support of Trade Exchanges) in a bid to save JCPOA after the withdrawal of the United States. The mechanism, which is yet to prove its effectiveness, is said to initially cover trades of food, medicine and medical devices and to gradually include other areas.

Europeans should provide resources for INSTEX to enable it to trade with Iran, he said, adding, “one should see whether Europe is making empty promises or taking practical steps in the two weeks that remain until the deadline.”

The post Iran ‘serious’ about reducing JCPOA commitments: Kharrazi appeared first on Iran News Daily.

The easiest way to operationalize INSTEX and STFI is that European countries start oil import or grant a letter of credit to European exporters to Iran, he highlighted.

If Europeans are concerned about the US reaction to EU states’ exports of goods to Iran, they can test their ability by exporting emergency supplies and medicine, he said, adding that the ‘ball’ of implementing INSTEX is now in Europe’s court.

In late January 2018, European signatories of JCPOA (Joint Comprehensive Plan of Action) announced the establishment of a special trade mechanism dubbed as INSTEX (Instrument in Support of Trade Exchanges) in a bid to save JCPOA after the withdrawal of the United States from it.

INSTEX, which has yet to become operational, is registered in Paris and headed by German banker Per Fischer who visited Iran last week and discussed the status of the mechanism with Iranian officials.

The mechanism is said to initially cover trades of food, medicine and medical devices and to gradually include other areas.

The post Hemmati lashes out at EU for ‘threadbare’ remarks over INSTEX appeared first on Iran News Daily.

INSTEX is a special-purpose vehicle established in January 2019 by France, Germany and the United Kingdom to facilitate non-dollar trade with Iran in a bid to bypass US sanctions.

The Tuesday meeting will also cover discussions on ways of cooperation between the two institution, how businesses will be using the trade mechanism, and a review on the next steps aimed at expanding the area of activities within INSTEX to other trade and related fields.

The meeting will be attended by representatives of the Iranian Ministry of Foreign Affairs and other ministries and related organizations, as well as representatives of the political and economic sectors of the European Union and the INSTEX’s president, Per Fischer.

Meanwhile, the French embassy in Tehran posted a tweet on Monday about the meeting, saying “E3 Heads of Missions welcome INSTEX’s president, Per Fischer, to Tehran. Important step to discuss with Iranian counterparts [on] how to make the EU-Iran trade mechanism operational!”

The post Iran, E3 to discuss INSTEX in Tehran today appeared first on Iran News Daily.

You should follow tasks in a serious way within the laws of the country. You should not wait for anything or anyone. One day, we made the economy of the country dependent on the JCPOA [the Joint Comprehensive Plan of Action]. The JCPOA failed to eliminate our economic problems and to help us in a noticeable way. The result was that the people became “conditional” towards the JCPOA so much so that when that dude [Donald Trump] announced that he wanted to get out of the deal, we experienced turbulences in our market. This has continued since he has declared so. Consequently, we have become conditional. We have conditioned the people to this situation, too.

As for the European packages and proposals, we should not condition the people again. Of course, the Europeans have no other choice, much to their displeasure! They should say how they want to defend our interests through these proposals which are referred to as “packages”. However, you should not turn this into one of the main issues of the country. Whether or not European packages are offered to us, we have certain tasks to carry out in the country. We have certain duties and regulations. These duties should be fulfilled and you should pursue them. We should not tie down the economy of the country to something which is not in our control.

Of course, they are behaving in a nasty way—I do not want to enter into the discussion about the European packages, European behavior and the like, as this requires a detailed discussion—I have said to Mr. President that they are sticking to their November timetable and they are constantly putting it off to November so that they give us very little or give us nothing once everything is firmly established and once sanctions are fully in place. This is what they are after. This shows their malevolence.

I read in the newspaper that Trump has said that he wanted to give some words of advice to Theresa May about adopting strict measures against Iran, but that it was her, instead, who gave him words of advice in that regard. They are such people. Then, they call Dr. Rouhani to express respect and to show their good will. They should be viewed like this [with suspicion] because they are vicious people. They are very vicious. I have tons of things to say about the Europeans, not because of their present-day policies, rather because of the viciousness that European governments have shown in the course of the past centuries. I have many things to say, but I do not want to discuss these matters now.

In any case, you should not tie down the economy of the country to European packages. We have certain tasks to carry out inside the country and we should attend to them. Of course, they should certainly abide by it [the packages]. However, we will not rely on them for resolving our problems.

Of course, I believe that relations should be maintained. Friends who have been in contact with me all these years know that when it comes to diplomatic relations, I believe that relations should be strengthened, developed, actualized and expanded. This is what I believe in. I do not believe in isolation, breaking off relations and the like, except for a few cases like that of the US. Apart from that, I do not believe in these things. Our relations with the East should be strengthened. Our relations with the West should be strengthened as well and we should do this as much as we can. The operational and purposeful activities in the realm of diplomacy should be expanded. In other words, the diplomacy of the country should expand its activities: purposeful activities.

The post Don’t rely on ‘vicious’ EU package for resolving economic issues appeared first on Iran News Daily.

After months of delay and despite the 2015 commitments of European leaders towards the Iran nuclear deal, the so-called E-3 (Germany, France and the UK) registered the Instrument in Support of Trade Exchanges (INSTEX). However, this special purpose vehicle (SPV) has no engine or driver and doesn’t conform with the trade and investment promises made in return for dramatic reduction in Iran’s nuclear program.

The post INSTEX: EU assumes Iranians walking on banana leafs appeared first on Iran News Daily.

Expressing regret over the unilateral withdrawal of US administration from nuclear deal, European Union’s ambassador to the United States David O’Sullivan said trade and commerce with Iran is part and parcel of INSTEX.

The post Trade with Iran part of SPV payment mechanism appeared first on Iran News Daily.

 Danish multinational pharmaceutical company ‘Novo Nordisk’ has voiced readiness to resume its cooperation with Iran following the creation of EU’s trade mechanism to facilitate trade with Tehran in the face of US sanctions.

The post Danish pharmaceutical company ‘Novo Nordisk’ ready to resume coop. with Iran appeared first on Iran News Daily.